Ah, it seems it was changed a bit:
Users with non-Latin usernames are welcome to edit in Wikipedia.
However, scripts of non-Latin languages (such as Arabic, Armenian,
Chinese, Cyrillic, Greek, Hebrew, Hindi, Japanese, Korean, Thai and
others) are illegible to most other contributors of the English
Wikipedia. As a courtesy to the rest of the contributors, users with
such usernames are encouraged to help them navigate by means of Latin
signatures, Latin user redirects, and an explanation on their
userpage.
<http://en.wikipedia.org/wiki/Wikipedia:Username_policy#Non-Latin_usernames>
Last I heard, which may have been some months ago, non-Latin usernames
were being flat-out blocked on sight. Not because they might be
offensive or anything, but because English-speaking admins would be
unable to tell them apart in the event of vandalism, etc. There was a
big fuss about it from some non-Latin-alphabet-using wikis. The
current wording seems like a good compromise to me, and should make
this not so much of an issue. But it would still be nice for people
to be able to contribute in local-language usernames if desired, IMO.
Not, in any case, a blocker feature: get it working first. :)
I hadn't noticed that change either. It's a good one, though. The main
issue I have with non-Latin names is that I can't pronounce them.
Reading something with unpronounceable words in is much slower than it
otherwise would be, since one keeps tripping up over the words. Latin
signatures fixes that pretty much completely. There is nothing wrong
with names in a foreign languages, it's just foreign scripts which are
a problem, all users need to do is transliterate their username as a
sig..